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High court issues non-conviction-based forfeiture orders

In recent months, the Economic and Financial Crimes Commission (EFCC) has succeeded in obtaining two final forfeiture orders of property without there having been a prior conviction.

First order

In June 2017 a final forfeiture order of $43.5 million was obtained from the Federal High Court in Lagos. The forfeiture order was an in rem order, granted following the discovery of the funds in an apartment in Lagos, which no party formally claimed. The application for the order was served on the company that had paid $1.658 million in cash to purchase the apartment. According to the unchallenged evidence put before the court, the individual responsible for making the payments on behalf of the company was the wife of the director general of the Nigerian Intelligence Agency (NIA), a government division tasked with overseeing foreign intelligence and counterintelligence operations. When the money was discovered, the media reported that the director general claimed that it was part of the funds intended for the NIA's use in conducting covert operations. The director general was suspended and an investigation was ordered into the circumstances that had led to so much government money being kept in such a manner. Several months after the investigation was ordered, no information as to the outcome of the investigation, or whether it has been completed, has been made public.

Second order

On August 7 2017 the EFCC obtained another final forfeiture order from the Federal High Court in Lagos in circumstances where no prior conviction had been obtained. On this occasion, the forfeiture order was in personam against:

Nigeria's former minister of petroleum, against whom the US government had commenced proceedings seeking the forfeiture of other assets as part of its Kleptocracy Asset Recovery Initiative;

the company that held the title to an apartment building in Lagos; and

a lawyer who had incorporated the company, allegedly on the former minister's instructions.

The court order forfeited to the federal government $2.75 million that had been found in an account in the company's name, as well as the apartment building.

Comment

These forfeiture orders are notable because they were non-conviction based; no criminal charges appear to have been laid in relation to either order. The orders were granted under the Advanced Fee Fraud and Other Related Offences Act 2007, which confers powers on the high courts to order the forfeiture of property without there having been any prior criminal conviction. To exercise this power, the property must have:

come into the EFCC's possession as unclaimed property; or

been found in the possession of any person by an EFCC officer and be reasonably suspected to be the proceeds of an unlawful activity under the act or other legislation.

In such an event, the court may, on being satisfied that the property is unclaimed property or the proceeds of unlawful activity under the stipulated legislation, order the property to be forfeited to the federal government.

In the above cases, no party came before the court claiming to be entitled to any of the property. Consequently, the court was not called on to make any determination in a contested application. It will be interesting to see how these orders, which appear to have been made on doubtful grounds, are addressed if any contested applications for non-conviction-based forfeiture orders come before the courts. The grounds that empower the courts to make such forfeiture orders – unlawful activity under specified legislation – were not set out in either case and it is open to speculation whether a court would have made the orders if the applications had been contested. Nevertheless, until such an application is contested, the orders act as examples of two Nigerian cases in which the courts' power to make non-conviction-based forfeiture orders has been exercised.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.